Major economic data is out this morning, and it’s having an impact on trading futures. Inflation metrics and employment tallies — both sides of the Fed’s dual mandate — were represented. As a result, the Dow moved from +3 points directly ahead of the releases to -180 points currently, the S&P 500 went from -1 point to -30 points and the Nasdaq slid from +7 to -140. The small-cap Russell 2000 has already given up most of its gains from yesterday, -36 points.

Producer Price Index (PPI) Jumps 90 Basis Points in a Month

Headline PPI — the wholesale side of inflation, as opposed to the retail print Consumer Price Index (CPI) out Tuesday morning — jumped from 0.0% a month ago to +0.9% today, reporting for the month of July. Stripping out volatile food and energy costs, we’re still up 90 basis points (bps) on core PPI month over month. Ex-food, energy and trade, we have tripled expectations to +0.6%. These are now at the hottest levels since 2022.

Year over year is a slightly different story, as early in the year they were still over +3%. July’s headline PPI came in at +3.3% — the highest since February, but also up 90 bps from an upwardly revised +2.4% for June. Core PPI year over year soared +1.1% in one month to +3.7% — the highest level since March. Ex-food, energy and trade rose just 30 bps month over month to +2.8%.

To the extent producer prices lead into consumer prices — not completely, but undeniably part of the economic chain — we might expect higher CPI data as of the September print, which hits the tape roughly a week ahead of the next Fed meeting on interest rate policy. Depending on how high those results become may put the rate-cut being priced into the market currently in jeopardy. At very least, I don’t hear much about a pending 50-bps cut following this PPI report.

Jobless Claims Remain Range-Bound: 224K, 1.95M

Weekly Jobless Claims are also out this morning, being a normal Thursday. Initial Claims dipped -3K to 224K week over week, now sub-230K for 6 straight weeks. (Remember the first week of June was 250K with an upward arrow, but these numbers have methodically diminished since.) Recent lows were +219K four weeks ago.

Continuing Claims notched its 12-straight week above 1.9 million without tipping into the psychologically relevant 2 million longer-term weekly jobless claims. A headline of 1.953 million is down -15K from the downwardly revised 1.968 million the prior week — which, incidentally, is still the highest level we’ve seen since November 2021. 

From mid-April through late May, weekly longer-term claims rose +120K. But they have remained frozen just below 2 million since. For some perspective, we spent even a longer time in the 1.8 million range of continuing jobless claims — from late summer 2024 to early spring this year. Also, longer-term claims do have an expiration date, though this is not a straight number across all circumstances.

Earnings Reports Ahead of the Open

Heavy machinery manufacturer Deere & Co. (DE Quick QuoteDE - Free Report) posted fiscal Q3 results this morning, outperforming on both top and bottom lines: earnings of $4.75 per share beat the Zacks consensus by +7.8%, while revenues of $10.36 billion outpaced expectations by +1% ahead of the bell. Yet full-year guidance was a little softer than investors were looking for, and shares are selling off -6% on the news. For more on DE’s earnings, click here.

A bevy of publicly-traded Chinese firms are also out with earnings results this morning. JD.com (JD Quick QuoteJD - Free Report) posted earnings of 69 cents per share for a +38% positive surprise, while Weibo (WB Quick QuoteWB - Free Report) surged past bottom-line estimates by +100% to +54 cents per share. NetEase (NTES Quick QuoteNTES - Free Report) surpassed expectations by 3 cents per share to $2.07, and Vipshop (VIPS Quick QuoteVIPS - Free Report) beat by a penny to 57 cents. JD, Weibo and VIPS are all up in pre-market trading, while NTES is lower by -6%.